The SARIMAX model incorporates and integrates recent trends, seasonality, historical sandbagging, carry forward or carry back amounts from the prior quarter or year ago comps, essentially turning an estimate into a science.
In this scenario we automatically detect McDonald’s ($MCD-NYSE) primary drivers based on iterating through various quarterly datasets and then using the combination of best identified drivers in a SARIMAX model to forecast financials.
While this can work for a number of line items in an income statement, at a practical level this works best in forecasting revenue.